Byline: Samantha Conti

MILAN — Limited somewhat by startup costs associated with retail stores and other new projects, Giorgio Armani SpA said net profit climbed 11 percent to $107 million last year. Armani issued its yearend results on Thursday, three months after releasing preliminary figures for 2000. As reported, Armani’s consolidated net revenues last year — excluding the sales of licensed products such as fragrances, eyewear and watches — grew 20 percent to $910 million, and are expected to grow a further 20 to 25 percent this year. All figures are calculated at current exchange.
In January, a company spokesman had said that net profit growth would be in line with that of net revenues. On Thursday, however, he pointed out that “significant startup costs” associated with the opening of the Armani/Via Manzoni store in Milan, the launch of the Armani Casa collection and the expansion of the accessories division had weighed more heavily than expected on the firm’s bottom line.
Among the new figures released by Armani on Thursday was operating profit, which rose more than 8 percent to approximately $170 million. Overall wholesale turnover rose 8.4 percent to $1.32 billion, while retail sales amounted to more than $3.18 billion.
The statement added that the company spent a total of $91 million on its strategic projects including the acquisition of GFT’s factories for the production of the Armani Collezioni line, the formation of a joint-venture company with the Zegna Group for the production of the men’s Armani Collezioni line, and the purchase from Itochu of a further 25 percent in Giorgio Armani Japan. Armani now has an 85 percent stake in Giorgio Armani Japan.
The company also spent the money on expanding its retail network around the world.
The statement said the firm would use its cash pile of $280.3 million for further expansion. That money will go toward building a joint-venture company with Vestimenta for the production of the men’s and women’s Borgonuovo line, and toward the retail and distribution operations for the Armani Collezioni business.
The money will also be invested in 27 new units for the Giorgio Armani, Armani Collezioni, Emporio Armani, A|X Armani Exchange and Armani Casa stores. The designer also plans to open his new show space and showrooms on Milan’s Via Bergognone in October.